Getting my hands on an Analyst Report
Does anyone know how to even get these analyst reports? It’s easy to see recommendations that are posted online, but what if I want to read through the actual analyst report ?
I did some research today and ended up calling Thomson Reuters. They supply analyst reports but for a price. Since I didn’t find an online billing method, I figured that this is probably not for individual investors. I called to confirm and I was told that it costs about $1,000/month and I must have a relationship with the brokerages before I can subscribe. I’d have to fill out a qualification form. Since I don’t think I’ll have a chance in qualifying for that, I went to see if there were any other ways to access these reports. I came across http://www.corporateinformation.com At first I thought this site provided reports from other analysts like UBS, Deutsche, Citi, RBC Capital Markets, etc. but it turns out they only provide reports from their own analysts and even those are expensive. It was between $100(Student Rate) and $975 per year. That $975 is out of my price range and I’m not qualified as a student anymore. Regardless of the price, I don’t know how good these reports would be since it’s only from 1 analyst. That’s one perspective.
I’m starting to wonder how I can ever read into analyst reports and do my due diligence if I can’t get access. I can’t just have one analyst report either, I need to have them all for every company that I’m interested in. It’s a love-hate relationship. I can’t ignore them because they are major market movers. A Sell recommendation can cripple a stock, and a Buy recommendation can boost a stock significantly. I know that whenever I’m holding a stock that receives a new buy recommendation, I’m ecstatic or at the very least, relieved!
I have not given up. I emailed Ericsson to request for their most recent analyst reports. I read that this is a way of getting access as well but I’ll see. Ericsson has a lot of analyst coverage and they conveniently have it on their website for investors. I do not own any Ericsson stock.
I find a lot of very well written articles and here is one them to explain the 3 different types of analysts:
- Buy-Side – Work for pension fund and mutual fund companies and used internally
- Sell-Side – Work for brokerage firms and “Sell” their ideas to individual and institutional clients.
- Independents – not employed by either brokerage firms or mutual/pension funds but their analysts are usually provided for a fee
It’s the Sell-Side analysts that I want access to, they should be the most comprehensive and detailed and they’re used by the Buy-Side analysts to figure out whether their own fund/pension should be buying.
The reason why I wanted to see these reports were to have a look at a section towards to end of the report.
There should be a section that provides information on what percentage of companies have been receiving the various recommendations: Buy, Hold, Sell, etc. In the UBS report that I had talked about in an earlier blog, it was called “Current WMR Global Rating Distribution.” This section is supposed to reduce the problem where all the recommendations are BUY BUY BUY because it would disclose how many recommendations are BUY as a percentage of the total.
I believe this section was added as a result of Eliot Spitzer’s legal battles with Wall St. He went after some analysts and ended up fining banks and brokerages millions of dollars. Here’s an article written about him in 2002 in Time Magazine before the sex scandal he had in 2008.
The concern that has arisen from this is that analysts can easily spend less time on researching a company, and make sell recommendations for companies that they have no interest in. No financial incentive/commission may mean SELL SELL SELL. Now I wonder if there are some companies out there that are receiving SELL ratings that might actually show some potential. Certainly, a SELL rating from only 1 analyst might be worth having a look at how in-depth their research and how they came to the conclusion. On the other hand, I’ve been reading that 2/3 of stocks aren’t going to make me any money anyway so there’s a good chance if you chose a company randomly, it should be a SELL.
UPDATE: Ericsson would not release any reports. They said I should contact the analysts and request access because they are not allowed to release any. “We don’t have permission (from the firms) to forward any reports so that’s the reason why you need to go directly to them.”